The forex market, also known as the foreign exchange market, is a 24-hour market that operates from Sunday at 5 p.m. EST to Friday at 5 p.m. EST. However, the market is not open for trading 24 hours a day. It is divided into four major trading sessions, each with its own distinct trading hours.
The four major forex trading sessions are the Sydney session, the Tokyo session, the London session, and the New York session. Each of these sessions has its own unique characteristics and trading opportunities.
The Sydney session opens at 5 p.m. EST on Sunday and closes at 2 a.m. EST on Monday. This session is the least volatile of the four and is often referred to as the “quiet time” in the forex market. However, there are still trading opportunities available during this session, particularly for traders who focus on the Australian dollar and New Zealand dollar.
The Tokyo session starts at 7 p.m. EST on Sunday and ends at 4 a.m. EST on Monday. This session is often referred to as the “Asian session” and is the most active forex trading session in the world. During this session, traders focus on the Japanese yen, as well as other Asian currencies such as the Singapore dollar and the Hong Kong dollar.
The London session begins at 3 a.m. EST and closes at 12 p.m. EST. This session is the most liquid of the four and is often referred to as the “European session”. The major currency pairs, such as the EUR/USD, GBP/USD, and USD/CHF, are most active during this session. The London session is also known for its high volatility, which can provide traders with significant trading opportunities.
The New York session starts at 8 a.m. EST and ends at 5 p.m. EST. This session is often referred to as the “North American session” and is the second most liquid session after the London session. During this session, traders focus on the US dollar and the Canadian dollar. The New York session is also known for its high volatility, particularly during the overlap with the London session.
It is important to note that the forex market is open for trading 24 hours a day, but not all currency pairs are active during all four trading sessions. For example, the AUD/USD pair is most active during the Sydney session, while the GBP/USD pair is most active during the London session.
In addition to the four major trading sessions, there are also trading sessions that overlap. These overlapping sessions can provide traders with increased liquidity and trading opportunities. The most significant overlap occurs between the London and New York sessions, which lasts for approximately four hours.
Trading during the forex market hours requires a thorough understanding of each trading session’s characteristics and trading opportunities. Traders must be aware of the economic events and news releases that can impact each currency pair during each session. For example, during the London session, traders must be aware of the European Central Bank’s monetary policy decisions, while during the New York session, traders must monitor the US non-farm payroll report.
In conclusion, the forex market is a 24-hour market that operates from Sunday at 5 p.m. EST to Friday at 5 p.m. EST. However, the market is divided into four major trading sessions, each with its own distinct trading hours and characteristics. Traders must have a thorough understanding of each session’s characteristics and trading opportunities to be successful in the forex market.
